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This past week five IPOs debuted, six IPOs updated terms and at the time of this writing… four new IPOs were filed.
The previous week was rocky for the IPO market as a deal that was considered “hot”…disappointed in its debut. (Surface Oncology)
Let’s start with the good. Pivotal Software (PVTL) priced a full-size deal, 37.0mm shares, at the midpoint of the range — $15.00 and opened at $16.75 for an 11.7% gain. The deal traded furiously in the first 15 minutes and sold all the way to a low of $15.11 before stabilizing in its first hour.
As for Surface Oncology (SURF)…the deal was upsized from 6.0mm to 7.2mm shares and priced at the high-end of the range, $15.00. “SURF” took well over an hour to open from its 11:10 am EST scheduled debut time and ultimately disappointed with a first trade of $14.75. The broken IPO immediately traded to a low of $13.00… never once managing a single trade at the issue price in its first week. It is our opinion that either the underwriters mis-priced the deal or extremely fast money was in the books…or potentially both — both of which is a lose-lose situation. Yes, we know Wall Street has changed over the years…but to not open a deal even flat has become very commonplace. The frequency that this has occurred makes one question the color that the underwriters are putting out within their own respective firms.
The other biotech offering to come to market this week, MorphoSys AG (MOR), fared well. The company’s ordinary shares trade on the Frankfurt Stock Exchange making the deal a tricky offering to cover. MOR priced 8.3mm ADSs at $25.04 and opened at $26.16 for a 4.3% gain at first trade.
GrafTech International Ltd. (EAF) downsized its offering and priced $6.00 below the $21-$24 original range. EAF opened with a first trade of $14.75 for a loss of 1.7%. GrafTech traded the majority of its first week as a public company below the issue price.
The other company re-worked its deal failed to come to market. Vrio Corp (VRIO), a spin-off from AT&T, filed a FWP stating they would lower the shares offered and decrease the range. Ultimately, the company elected to withdraw its IPO citing market conditions.
The pair of bank IPOs had much different outcomes this week. Level One Bancorp (LEVL) performed as expected as LEVL upsized its offering from 1.0mm to 1.2mm and priced at the midpoint of the range, $28.00. The deal opened with a $1.00 premium and traded nicely in its debut…hitting a high of $30.79 in the first hour of trading. The other bank offering, FirstCaribbean International (FCI) postponed its IPO after demand was tepid for the deal throughout the week.
The other IPO set to debut this week, Mereo Biopharma (MREO), did not come to market as planned and the underwriters maintain that this deal is in ‘day-to-day’ status. There is no further information available at this time.
Looking ahead to this week, there are six IPOs on the schedule — click on the logos below for a preview of each deal.
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